Q.The rupee-dollar exchange rate moves from ₹80 per US dollar to ₹85 per US dollar. Has the rupee appreciated or depreciated? Calculate the percentage change.

Needing MORE rupees to buy the same one dollar is a sign of the rupee's own value falling, not rising — the direction is easy to mix up. …

Since more rupees (85 instead of 80) are now needed to buy the same one US dollar, the rupee's value in terms of the dollar has FALLEN — this is a depreciation of the rupee (equivalently, an appreciation of the dollar).

Percentage change (depreciation) calculation:

$\text{Percentage depreciation} = \frac{\text{New rate} - \text{Old rate}}{\text{Old rate}} \times 100 = \frac{85 - 80}{80} \times 100 = \frac{5}{80} \times 100 = 6.25\%$ …

Compare old and new exchange rate; if more units of domestic currency are needed per unit of foreign currency, the domestic currency has depre …

Concluding the rupee has 'appreciated' because the number (85) is bigger than before (80) — a BIGGER number of rupees per dollar means the rupee is WORTH LESS, which is depreciation, n …